Annual Financial Statements > Directors’ report

Business of the Company

Aveng Limited is a South African registered and listed Company, included in the Construction and Materials – Heavy Construction sector of the JSE Limited, with interests in construction and steel beneficiation. The Company does not have a holding company. Primary subsidiaries include Aveng (Africa) Limited, Trident Steel Holdings (Pty) Limited and Aveng Australia Holdings Pty Limited. An organisational chart of the Group, detailing its primary subsidiaries and associated interests, may be found here. Details of directors’ interests at 30 June 2009 are detailed in note 30 of this annual report.

Directors’ responsibilities relating to annual financial statements

It is the directors’ responsibility to prepare annual financial statements that fairly present the state of affairs, the results of operations and cash flows of the Company and of the Group. The external auditors are responsible for independently reporting on these annual financial statements.

The annual financial statements set out in this report have been prepared on an historical-cost basis, except where stated otherwise, and in accordance with International Financial Reporting Standards (IFRS). They are based on appropriate accounting policies which have been consistently applied, unless otherwise indicated in the notes to the financial statements. The annual financial statements have been prepared on a going-concern basis. The directors have no reason to believe that the businesses of the Group will not be going concerns in the year ahead.

To fulfil their responsibilities, management maintains adequate accounting records and has developed, implemented and continues to maintain systems of internal financial controls.

The Company and its subsidiaries’ internal financial controls and systems are designed to provide reasonable but not absolute assurance as to the integrity and reliability of the annual financial statements and to adequately safeguard, verify and maintain their assets. These controls are monitored throughout the Group on a continual basis. Nothing has come to the directors’ attention to indicate that any material breakdown in the functioning of these controls, procedures and systems has occurred during the year under review.

More detailed information in respect of the board’s mechanism for continual review of the controls and risks are set out in the corporate governance.

Financial

There has been no material change in the Company’s financial or trading position since the end of the previous financial year.

The results of the Group’s operations for the year are set out in the income statement.

Details of the movement in issued share capital and reserves are provided below and in the statement of changes in equity.

The segmental report is set out here.

The consolidated annual financial statements of the Group are set out here and the annual financial statements of the Company are set out here.

Details of earnings are provided here.

Accounting policies

The annual financial statements are prepared on the underlying assumptions of going concern and accrual as laid down in the framework for the preparation and presentation of financial statements – issued by the International Accounting Standards Board.

The Company’s accounting policies are subject to an annual review to ensure continuing compliance with International Financial Reporting Standards.

Investments

As reported last year, the Group acquired, with effect from 1 July 2008, the entire issued share capital of Keyplan (Pty) Limited, a company which provides engineering services in the water management market in southern Africa. All the regulatory approvals relating to the acquisition have been received.

Also with effect from 1 July 2008, the Group acquired 75% of the issued share capital of Built Environs Holdings Pty Limited (Builts), a commercial construction and engineering company based in South Australia. An additional 12,5% of the issued share capital of Builts was acquired with effect from 1 July 2009. In terms of the agreement signed with the previous owners of Builts, the Group will acquire the remaining 12,5% of the issued share capital on 1 July 2010.

The Group’s 50% interest in Megchem Holdings Limited was sold with effect from 30 June 2009.

Information regarding the Company’s interest in subsidiaries, associates, joint ventures and other available-for-sale investments are set out here.

Share capital

Consistent with prior years, the Aveng Limited Share Incentive Trust is consolidated into the Group’s results for reporting purposes as treasury shares.

The following changes to the number of shares in issue, including treasury shares, took place during the year under review:
Shares in issue as at 1 July 2008 398 478 989  
Less: Shares acquired in the market and the delisting of those shares (8 066 821) 
Add: Shares allotted, issued and listed as a result of the conversion of bonds to the value of R80 million 5 594 404  
Number of shares in issue as at 30 June 2009 396 006 572  


In terms of a general authority received at the annual general meeting of shareholders held on 24 October 2008, the Company or its subsidiaries may acquire ordinary shares up to a maximum of 20% of the issued ordinary shares. A total of 8 066 821 shares were acquired in terms of this authority during the year under review. Approval will be sought at the forthcoming annual general meeting on 23 October 2009 to renew this general authority.